Monthly Archives: September 2016

Drop Shipping Retail in 2016

The author of this blog has previously reported on hard lessons that he’d learnt when trying to do drop shipping (How-not-to-start-your-online-retail-business). Has anything changed with drop shipping since three years ago?

What is drop shipping?

Just a quick reminder what drop shipping is:

Drop shipping, according to Shopify, is an online retail model where a retailer doesn’t keep the products it sells in stock. Instead, when a retailer sells a product, it purchases the item from a third party and has it shipped directly to the customer. As a result, the retailer never sees or handles the product.

What are the advantages and disadvantages of drop shipping?

Joel Padi, writing in the Market Mogul has recently commented on drop shipping. He mentioned the following advantages and disadvantages:


  • It is easy and cheap to start an online drop ship business – you only need an e-commerce website;
  • No capital is needed to secure a premises and to buy inventory;
  • The costs for the retailer only starts when the customer has paid for her order;
  • The drop ship retailer can operate from anywhere at any time.


  • Low margins – because entry is easy and many of the products is from the same manufacturer;
  • Intense competition – thousands of websites offering the same products. Drop ship retailers must invest many dollars and lots of time for prospect customers to buy from them;
  • Lack of quality or brand control – drop ship retailers are totally depended on the drop ship suppliers for quality or brand control;
  • Availability – most of the drop ship retailers purchase their products from a few suppliers. Retailers can occasionally expect to find products are out of stock after an order has already been placed;
  • Shipping issues – the cheapest source of drop ship products is from countries such as China. Typically this results in a month-long wait on deliveries.

Has anything changed with online drop shipping retail the past three years?

To answer my own question – no! The alternative to drop shipping is for retailers to find a niche product to trade online. Customers are looking for niche products online because they have a specific need for them. Retailers may therefore ask a premium price for satisfying those specific needs…

Visit eBizplan for more on online retailing


Bricks and Clicks Retail – Shopping Experience makes the Difference

Shopping experience matters. Deloitte reports that while shoppers are still visiting Bricks and Mortar shops to complete transactions, more sales are driven by digital devices.

The findings reveal that while over 90% of purchases are still made in-store, around 40% of visits to a shop are influenced by digital channels.

Bricks and Clicks retailers should increase their customer’s shopping experience

David White of Deloitte believes digital platforms are driving customers to shops. Bricks and Clicks retailers should therefore focus on streamlining the shopping experience they offer across all channels. Bricks and Clicks retailers should mimic the shopping experience at their shops that their customers had online.

Customers who visit Bricks and Clicks retailers have empowered themselves with knowledge they found online. They know what they want when they visit the shop.

Bricks and Clicks retailers can improve the shopping experience of their customers   by doing the following:

  • Eliminate the cash register in the shop. Rather let salespeople handle the sales transaction on smartphones before sending customer receipts via email.
  • Give customers the option to buy products online. They can pick them up at the shop or buy online and return them at the shop.
  • Enable customers to scan and bag their own merchandise.
  • Bricks and Mortar retailers can introduce digital technologies, such as virtual fitting tools and virtual product aisles, in their shops.
  • Some forward thinking retailers is considering introducing a virtual mirror that overlays a digital image on top of a normal mirror allowing the customer to see how clothing fits.

By making the shopping experience as efficient and simple as possible at the Bricks and Clicks’s physical shop, the business will grow. The customer will enjoy the same experience in the shop as what she is experiencing online.

Unfortunately, most retailers are still unable to meet the needs of their consumers by creating a shopping experience where online and offline intersect.

Visit eBizplan for more on adding Clicks to Bricks.


Image: Wikipedia

The Retail Warehouse – Getting the Right Product to the Right Customer

The function of the warehouse has changed substantially for Bricks and Clicks retailers. Brick and Mortar retailers traditionally used their warehouses to receive and store their merchandise to later put it on the shelves to be sold.

Now, in the age of online retailing, the role of the warehouse has changed from a dusty storage facility to a dynamic customer fulfillment center.

The role of the warehouse as customer fulfillment center

A fulfillment center is a place where retailers receive incoming orders from customers, and where the products are picked, packed and dispatched. It may also be used strategically  to enhance your online business.

Amine Khechfé writing in SupplyChainDigital shares the following tactics that companies are using to grow their online success.

  • Drones in the warehouse.  Walmart suggests it may soon be using drones to inspect labels and inventory. It is a process they say usually takes about a month to complete with handheld scanners.
  • SMEs transform storefronts into warehouse space. The retailer Target are now converting some of its storefront space to mimic warehouses in order to increase sales and adapt to the changing needs of the consumer.
  • Amazon builds urban warehouses. Amazon can now cater for customers who want one- and two-hour delivery time-frames by taking their fulfillment centers into urban areas, .
  • SMEs are using predictive data to pinpoint new warehouse locations. Predictive technology allows small businesses to meet consumer expectations. It may help small businesses figure out the best place to build a new warehouse. The technology also supply shoppers with a more accurate delivery window, and identify where to stock products.

Multi-channel shoppers have high expectations. However, getting the right product, at the right customer, and quickly may allow you to stand out above your competitors.

Visit eBizplan for more on business- and marketing planning.

Image: Zappos